SIBUR actually put an end to the joint project of rubber plant in Saudi Arabia with Saudi Aramco and Total. The company initially doubted his participation, and now the market situation made the project uneconomical. Also pandemic coronavirus pushed back six months to start another plant for butyl rubber in India. Experts explain that this type of product is not the best of times, as the demand for rubber has fallen more than for other types of petrochemical products.SIBUR, Saudi Saudi Aramco and France’s Total has stopped the work on creation of joint petrochemical production in Saudi Arabia, told reporters the head of the Russian company Dmitry Konov. According to him, the partners do not see the economic potential of the project in current market conditions. In December, the partners completed a feasibility study of the project, but, as explained by then Mr. Konov, SIBUR was not ready to invest in detailed design.The company agreed to build a plant for the production of rubber in Jubail in 2017. He was to become the first Russian petrochemical project in Saudi Arabia, and the investment amount was estimated at $1 billion But even then the participation of the Russian company was in question. As explained in 2019 Mr. Dmitry Konov, the project in Jubail is closely linked with other petrochemical — Amiral (implemented in the framework of the joint venture Saudi Aramco and Total), which is still pending a final investment decision.So, Dmitry Konov, said that before the end of the year it is planned to launch a venture to produce butyl rubber in India in a joint venture with the national Reliance Industries Ltd (for SIBUR 25.1 percent). He explained that the construction of the plant, which was about to enter the summer, has slowed the pandemic coronavirus. It is expected that initially the plant will produce 120 thousand tons per year of butyl rubber, and from 2021 — 60 thousand tons of globulelike that the appropriate amount will reduce the capacity of the butyl rubber.Also Dmitry Konov said that SIBUR is at an early stage of preparation of project documentation in the framework of the JV with Sinopec for the construction of production nitrile butadiene rubber (capacity — 50 thousand tons) in China. The project has been discussed since 2014, investment was estimated at $120 million, and the launch was planned for the second half of 2018. But the project has not begun, and in 2018, the CEO of SIBUR said that the project was postponed indefinitely. But in September, 2019 SIBUR and Sinopec has returned to the idea of construction and has signed a Memorandum of understanding. The Russian company’s share in the JV will be 40%, although it was supposed to only 25%. In Ciboure, the resumption of the project was explained by the fact that China has developed a high consumer demand for this type of rubber.Refuses SIBUR and its basicallyx Russian projects, though in the first half of 2020, the company has reduced capital investments by 28.3%, to 48.5 billion rubles. At the same time, as said Dmitry Konov, the company will transfer part of the capital costs for the next year. “We believe that this will not impact significantly on our key projects,” he explained.The largest planned investment projects SIBUR is the Amur gas-chemical complex worth $10.7 billion (annual production of ethylene 1.5 million tons per year). As reported by CFO Alexander Petrov, SIBUR is discussing the possibility of raising funds of the national welfare Fund (NWF) to Finance the plant. “But it depends on the government and regulators that have access to this kind of financing. We already had experience of this type of financing and believe that the project may qualify for such support,” he explained. The company has already drawn from the Fund of about $1.75 billion for the construction of another plant — the “Zapsibneftekhim”.SIBUR expects to receive compensation of historical costs for construction of the Amur gas-chemical complex from its partner, China’s Sinopec, which has to obtain 40% in the project. But the final investment decision has on the construction of MCC is still pending.In this sector, says the expert, the drop was not as strong due to the growth of packaging segment for the production of which polyethylene is used, and remedies, where polypropylene is used. “Plus, if you look on the main market of the polyolefins these companies — China, then he quickly recovered and was more resistant to shocks. Paradoxically, according to the American chemistry Council, most of all fell the market of chemicals and inorganic substances, but the first is not to SIBUR’s priority, and the second type of products he does not produce”,— said the expert.Olga Matushenko
